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Choosing The Right Contract For You - Part 1 - Prices

Choosing The Right Contract For You - Part 1 - Prices

The first thing to think about when you’re going to take on a new contract is whether you want to pay more now and less later, or just take out a humongous contract because a) you’ll probably get a free phone and b) you might use all of the free stuff you’ll get. The main thing you should care about when you’re comparing mobile phone contract deals is: the overall cost to you by the end of the contract.

One of the other priorities is to check out the up-front handset price. If the handset is going to cost you money then it’s probably because the price you pay monthly is less than ‘free’ handset monthly prices. There’s also a pretty good chance that the overall cost will come down, even if only a few £’s per month (but probably loads over the 18-24 months). We checked out a selection of deals on phone4u's website to see what we could decipher from the deal selector.

Mobile Phone Handsets Affect Contract Prices

For an iPhone 5 with O2 on a 24 month contract, paying £31 per month with a handset price of £99 will cost you an overall £843. This is marginally better than paying £36 per month with a £25 handset price, coming to a total of £889. That saves you £46 over two years, or £1.92 per month. You don’t actually get any more in terms of texts, minutes or data either, so you’re just paying £46 more because you didn’t buy the handset for a higher cost up-front. The top tier O2 contract of £41 per month will cost you £984 - but gets you a free handset plus 2GB of data compared to 1GB with the lesser cost contracts. That's actually not too bad considering 1GB per month costs £10 with O2 (so we'll assume £20 for 2GB), so if you're a heavy data user, you're saving money in a big way. If not, you're wasting money. Big time.

If you're a heavy data user go for the £41 a month tariff. If not, stick with the £31 a month tariff.

Another amazing handset, the Samsung Galaxy S III, can be found for free on the majority of all network deals leaving you to just pick the texts, minutes and data allowance you want. It’s not even that difficult here either as you’ve got a choice between more minutes and less data, or more data and less minutes, with unlimited texts for both. You can snap this phone up for as cheap as £26 per month for both versions of the contract, making the entire contract £624 overall. If you’re going to push the boat out and go for unlimited texts, unlimited minutes and 1GB of data, just throw £31 a month at O2. Not bad for the UK’s best-selling handset. It's so much simpler when you don't have to factor in the cost of the handset because you can just choose exactly what you need from your contract rather than deliberating over whether you want to fork out £100 up front.

Really easy choices to be made here. Big data or little data, what's your weakness?

The craziest deal we’ve seen so far is for the less-than-fun-sized Galaxy Note II, where Orange will give you 400 minutes, unlimited texts and 750MB data for £31 per month but the handset costs £149.99 – overall this comes to £893.99. Compare this to a deal literally right underneath: 600 minutes, unlimited texts, 1GB of data, FREE handset all for £33.50 per month, totalling £804. You’re getting more for less. What?! For the purpose of clarity, that particular price was after a £2.50 per month bill credit, but you’d still have saved £29.99 without it. A rather excessive jump to £41 a month gives you extra minutes, but at the cost of a £184 cost increase from the next 'no purchase cost' tariff down. Personally I can't think of anyone I would want to spend almost £200 talking to. Not even Santa.

With a baffling tariff structure it looks like the best deal here would be the £33.50 monthly option.

Choose The Best Mobile Phone Contract For You

Everyone uses their phones for different purposes. I use mine to prove my friends wrong by Googling stuff, not getting lost with Google Maps and keeping up to date on how boring my life is compared to everyone else's on Facebook - so as you can see, I prefer data over texts and minutes. I always choose a contract with a high data allowance and where possible unlimited texts, but the minutes have absolutely no part in my decision making process. For anyone else, really have a think about how much you use your phone for talking, texting or t'internet. Choosing a contract with a 1GB data allowance just might haunt you for the next two years.

*Protip - after 12 months you can sometimes downgrade a contract to the next lowest tariff.

Data is the financial burden for many contracts today. Most contracts will give you free text messaging, but of course that’s quite a farcical gesture considering the likes of Whatsapp, iMessage, BBM and Facebook Messenger that’ll send your messages for free(ish) anyway. If you’re a social networking guru or you have friends who use the messaging services I’ve just mentioned, forget about texts and simply concentrate on what the minutes and data will cost you. Also, keep an eye on the apps you've installed. Many apps today assume you're happy with them connecting to the internet at regular intervals during the day. This can sometimes wipe out your internet allowance and you may be in for a shock when your bill comes through.

As with most things that can cost you money today, using a comparison service will usually benefit you. OnRecycle will get you more money than any other mobile phone recycling comparison service, likewise, we're sure you'll find a mobile phone contract comparison service that'll have a deal that's right up your street!

Next we'll talk about the technical bits of your phone and why you might not need the latest and greatest iPhone or Galaxy.

Part 2 coming soon!

(Remember, you can sell your mobile for some extra cash with OnRecycle)